Family

Issues

Stage Details

Legislation -
Bill Sent To Committee
(Senate)
-
Nov. 13, 2007

Legislation -
Bill Passed
(House)
(258-155) -
Nov. 8, 2007(Key vote)

Title: Homeowners' Catastrophic Insurance Act of 2007

Vote Result

Yea Votes

Nay Votes

Vote Smart's Synopsis:

Vote to pass a bill that establishes a National Catastrophic Risk Consortium to inventory catastrophic risk and a National Homeowner's Insurance Stabilization Program to provide loans to qualifying state reinsurance programs.

Highlights:

Establishes the National Catastrophe Risk Consortium to work with states to create an inventory of catastrophe risk obligations held by state reinsurance funds and issue securities linked to the catastrophe risk insured in capital markets (Secs. 101 & 102).

States that the Consortium will be a nonprofit entity and that its earnings will not benefit any members, founders, contributors, or individuals with the Consortium (Sec. 104).

Authorizes $20 million to be appropriated each year from fiscal year 2008 through fiscal year 2013 to fund the Consortium (Sec. 108).

Allows the Secretary of the Treasury to create a program to make liquidity loans and catastrophic loans to qualified reinsurance programs to ensure the programs' solvency and improve the availability and affordability of homeowners' insurance (Sec. 201).

Requires that a catastrophic loan can only be issued to a state if the insured losses with a qualified reinsurance program are more than 150 percent of the amount of direct premiums for property and casualty insurance for risks located in that state over the preceding calendar year, and sets the loan's interest rate at .20 percentage points higher than other loans issued by the Department of Treasury with maturity terms of less than 10 years (Sec. 202).

Allows the Secretary of the Treasury to make contracts for reinsurance coverage available for purchase by qualified reinsurance programs (Sec. 301).

Limits the total potential liability for payment of claims under contracts made by the Secretary of the Treasury to $200 billion a year (Sec. 304).

Establishes the Federal Natural Catastrophe Reinsurance Fund to cover contract payments for losses — which will be composed of amounts received from contract sales, amounts earned on Fund investments, and other amounts appropriated each year (Sec. 305).